The Slum Next Door to Gangnam Exposes South Korea’s Wealth Gap

Just steps away from Seoul’s glitzy Gangnam district, residents who scavenge bottles for $10 a day are teaming up with landowners demanding more than $1 billion for the last remaining slum in the South Korean capital.

The two groups forged an unlikely alliance to oppose the Seoul government plans to put 4,000 units of subsidized housing on the land, a project intended to support President Moon Jae-in’s campaign to reduce the country’s high rates of poverty and yawning inequality. The city promised to build a “role-model for all urban development plans” when it outlined the project in June.

But the roughly 1,000 households already living in Guryong village fear being kicked out with nowhere to go and have sued for more compensation than the government’s offering. And the landowners, who haven’t collected rents in decades, are also unhappy with the financial terms. Their joint opposition is revealing the huge hurdles facing Moon’s plans.

“Tens of politicians came here and vowed to develop this town over the past few decades. But look around you! Nothing has changed,” said Song Sook-ja, a 62-year-old Guryong resident said. “All they care about is our votes. Once they have it, they forget. We are the voiceless, the invisibles, the forgotten.”

The fight over Guryong village has become a symbol for the wealth gap in South Korea. Gangnam, where the average apartment sells for about 2 billion won ($1.8 million), is synonymous with the conspicuous wealth satirized by Psy’s viral “Gangnam Style” video in 2012. Guryong, however, captures those left out of the boom, including the country’s oldest residents: More than four out of 10 Koreans older than 65 live in poverty, a developed-world high.

As of last year, South Korea had completed just 36% of Moon’s goal to add 650,000 units of public housing by the time he leaves office in 2022. The frustration with housing options could come to the fore in Seoul’s mayoral race in April, where Moon’s Democratic Party is looking to maintain control before the next presidential election.

The president’s struggle to address housing costs has helped drag his approval rating down to 38%, the lowest since he took office, in a Gallup Korea poll released Friday. Disapproval climbed to a record 54%, with almost one-fifth of those people citing Moon’s property market policies for their negative views.

The Moon administration will “continue to improve our citizen’s residential welfare by supplying more public rental housing,” Presidential Office spokesman Kang Min-seok said in a statement Saturday.

Seoul — home to almost one in five South Koreans — has only gotten more expensive, despite dozens of cooling measures by the government. Apartments in the capital cost an average of 925 million won ($774,000) as of June, up 50% since Moon took office in 2017. Record-low interest rates aimed at supporting the virus-hit economy have only contributed to the price appreciation.

Against this backdrop, the Seoul government turned its attention to Guryong village, where people displaced by the city’s rapid development ahead of the 1988 Summer Olympics have long dwelt illegally and rent free. Residents have established running water, electricity, mail delivery, a kindergarten and a church, and there are limits to what either landowners or the government can do to remove them.

South Korean law gives power to those occupying the land, and forced evictions would be unpopular with progressives Moon’s camp. A protest against efforts to remove occupants from a Seoul building in 2009 led to a fire that killed five demonstrators and a police commando — a debacle that dogged then-President Lee Myung-bak through the rest of his term.

The government has offered to acquire the land for around $383 million — roughly $4,500 per 3.3 square meters (35.5 square feet) — a price the owners say wildly undervalues the property. Lim Moo-lyul, a leader of Guryong Landlord Association that represents around 180 owners, said they want at least $18,000 per 3.3 square meters.

That’s four times the government’s offer, but still 30% less than the multiple for an apartment across the street in Gangnam. The landlords and the residents say they would get a better deal, if the government let private companies develop the land.

“The government should really take its hands off from this project,” Lim said. “They’ve done nothing over the past decades. They should give us the rights to develop the area, as how it should be done in any democratic country.”

With pro bono help from law firm SANHA, residents are suing the city of Seoul to stop the development. They also want to reverse a Gangnam district decision to reclassify their ramshackle houses as “structures,” a category that includes, for example, pigsties and other animal sheds. Their prior designation as “illegal shelters” is reserved for place people live and would command higher compensation.

They also want to reverse a Gangnam district decision to reclassify their ramshackle houses as “structures” as opposed to “illegal shelters,” which would command higher compensation costs.

“There is no legal ground to accept the residents’ demands, unfortunately,” said Lee Jin-yeon, a Seoul municipal government official who is responsible for the Guryong plan. “The residents are living there illegally, and we have rejected their proposal to develop the area by private companies.”

Among the residents, the promise of new units in the planned towers has fallen flat. Many earn money by collecting bottles and cans from Gangnam and selling them to recycling companies, a labor that might yield around $10 a day.

Han Young-ae, a 74-year-old resident, has lived in the village for 32 years, raising three children there. She earns about $240 a month delivering take-out. “It’s bloody simple,” she said. “We just can’t afford the rent.”

The Gangnam district has begun boarding up abandoned shelters to discourage anyone from moving in. Residents worry they’ll be the targets of arson or overzealous construction machinery.

“It’s an ongoing trauma,” Yu Kwi-beom, a 71-year-old village representative, who came to the town about three decades ago, said. “I always wear my clothes even during the hottest days in summer when I sleep, and also used to hold hands of my children when they were young. I was, and still am preparing myself to bolt out from my house immediately if there’s another fire.”

Many of the village’s residents are in their 70s or older. Even if the government can negotiate a sale with the landowners and successfully relocate the residents, most expect they’ll spend most of the rest of their lives in Guryong. They’ve heard too many promises to believe this time could be any different.

“Politicians are cowards,” Yu said. “No one wants to take any political risks.”

— With assistance by Stella Ko

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